Wednesday, March 12, 2014

Challenges and propositions - Part 2 of 5

The second emerged challenge in making supply chains sustainable is related to difficulties of operationalization. Following factors may contribute to the challenge of making sustainable supply chains operationally feasible by creating inertia i.e. a fear and high resistance to change.

Knowledge asymmetry
Although awareness about triple bottom lines is increasing, it became apparent from the research studies that knowledge asymmetry regarding all of their criteria has also increased as they are interpreted differently in practice. Due to the wide range of criteria that come under umbrella of macro definition of sustainable development offered by the Brundtland Commission, it is difficult to interpret all the triple bottom lines and their criteria from the micro levels and what it concretely means in different parts of supply chains. In addition, there is knowledge asymmetry regarding nature and extend of responsibilities of businesses which makes it difficult to comprehend among whom the responsibilities are shared in the supply chains. Due to difficulties in translating the triple bottom lines into relevant and prioritized activities for every process and/or stakeholder, they are rarely addressed beyond triadic relationships in the supply chains.

Change of mind-sets and behavior
Another obstacle towards operationalization is related to difficulties in changing the stakeholders’ mind-sets and behaviour.

Although there are evidence-based scientific claims about environmental and social problems caused by supply chains activities, there are still resisting mindsets that reject the claims or ignoring mindsets that erase the claims. Changing the mindsets becomes further challenging when the cultural or organizational distances in the supply chains increase. It also became apparent in the research studies that long-term strategic thinking; visionary leadership; and engagement or commitment by the co-workers might be lacking. Reluctance to turn intent into action and lack of consensus or misalignment between behavior or practice and visions will wash the sustainability as its talk cannot walk.

Difficulties in change of behavior may also be due to reductionist, positivistic, objective, and linear ways of thinking; compartmentalization and lack of completeness in perceiving sustainability; bounded rationality i.e. imperfection of human reasoning and impossibility of  taking completely ideal decisions; and satisficing i.e. behavior that satisfies limited aspirations without optimizing.

Uncertainties
Uncertainties can also hinder operationalization. For example, as highlighted in the research studies, there are strategic uncertainties regarding sustainability consequences of supply chain design such as time perspectives regarding changes in logistical set-ups and infrastructures; government legislations/ regulations and decisions; localization of production or primary industries; sourcing of material and components; facility location of static resources; commercialization of new clean technologies; competitive advantages and strategies formulated by stakeholders; and the nature of future fossil-free fuels and renewable energies and infrastructural changes for their production and distribution especially in global markets.

In addition, there are also a number of operational uncertainties or dilemmas in choice of the existing fuels, routing of the vehicles/fleet, negotiation of contracts, quality and timing in return flows in reverse logistics, unexpected/unforeseen incidents like order cancellation, delivery-time changes, consumer behaviour and demands, traffic congestion, road construction, flea markets, natural disasters, weather changes, accidents, mechanical failures, etc.

In order to decrease knowledge asymmetry, themes of sustainability have to be well understood and all the stakeholders should be persuaded. Researchers and media have a great responsibility for reducing the existing gap and inertia by providing scientific claims and sharing knowledge.

A pattern of sustainability emerges if the values and norms are understood, pursued, and integrated into behavior, strategies, and operations of all stakeholders as well as their organizations and interrelationships. Without operationalizing the strategies, sharing the responsibilities, and taking part and initiatives sustainability will be washed. In order to walk the talk of sustainability, “taken for granted mindsets” need to be changed and inertia against the operationalization of innovative processes need to be minimized.

As supply chains are dynamically transformative systems, all uncertainties existing in their transitions towards the sustainability targets cannot be omitted. However, the authorities should give the stakeholders enough confidence that the long-term targets will be persuaded, transparency in regulations and norms will be guaranteed, and innovative acceptable solutions will be fostered. In addition, resilience and self-organizing capacities of supply chains in dealing with uncertainties should increase.